Dividend Tax Policy and Dividend Payout of Food and Beverages Firms in Nigeria

Abstract

This study examined the effect of dividend tax policy on dividend payout in selected Nigerian food and beverages firms. The study employed a cross-sectional approach using both explanatory and exploratory design. Fifteen out of twenty one quoted food and beverages firms on the Nigeria stock exchange (NSE) as at December 2018 were randomly selected to constitute the study sample. Four hundred copies of structural questionnaire were distributed but only three hundred and twenty copies were correctly completed and useful for the analysis. The study revealed that dividend tax policy was significant on a dividend payout (f-statistic =27.52; p=0.000) with R-square =0.285. When the moderation variable effect (inflation) was considered, it was also found that dividend tax policy influenced dividend payout of the selected firms (F-statistic=15.89; p=0.000).The study further revealed that tax policy has significant effect on dividend payout in the selected firms. The study therefore recommended that management of firms should adopt more of stock dividend policy than cash concluded payout.